The acquisition extends Misys' penetration in the large and growing commercial lending segment of the banking software market through IQFS's market leading LOAN IQ product. LOAN IQ is targeted at top tier global financial institutions and corporates, providing its clients with a comprehensive software solution that manages the entire lifecycle of a loan from origination and deal tracking to administration and record maintenance. IQFS is headquartered in New York and currently serves 29 clients predominantly in North America. Misys expects to build upon IQFS's existing strong position in the North American market whilst achieving further penetration into the European and Asia Pacific markets. The purchase price was funded from Misys' existing resources.
IQFS will be integrated into Misys Wholesale Banking Systems. The CEO and President of IQFS Edward Ho will be among more than 100 staff transferring to Misys. In the year ending 31 December 2003 IQFS recorded revenues using Misys GAAP of some $22m. In the first year of ownership Misys expects IQFS to achieve revenue growth and make a positive EBIT (Earnings Before Interest or Tax) contribution to the group (pre goodwill amortisation arising from acquisition) after allowing for significant integration costs.
Ivan Martin, CEO of Misys Banking and Securities Division, commented: "This acquisition is directly in line with our strategy to build market-leading businesses in larger, faster-growing sectors within the banking software markets. The global commercial loan systems market is a large and attractive market. This is a market that is under-penetrated and we believe the acquisition of LOAN IQ in concert with our distribution capabilities provides a great opportunity to significantly extend the scope of our business".
Edward Ho, CEO and President of IQFS, commented: "Our products are proven, with organisations being able to eliminate as much as 30-50% of their loan origination and servicing costs through the reduction of front, middle and most of the back-office operational support functions. The loan syndication market is a truly worldwide market and we see real benefit now that we are part of a global software products group. Misys is a firmly established market leader in developing financial software solutions and will provide us with a platform for growth".